Key Takeaways

  • Midterms may favor Democrats, potentially limiting Trump administration’s agenda.
  • Defense spending uncertainty looms as FY26 budget negotiations begin.
  • Congress faces challenges in passing a defense appropriations bill for FY26.

Strategic Implications

The upcoming midterms and potential shift in control of the House could lead to increased scrutiny of the Trump administration’s defense spending priorities. The lack of clarity on FY27 budget projections suggests that defense spending may face significant uncertainty in the coming year, which could impact industry outlooks.